The ultimate cost of carbon
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The ultimate cost of carbon David Archer 1
1
& Edwin Kite & Greg Lusk
2,3
Received: 16 March 2018 / Accepted: 2 July 2020/ # The Author(s) 2020
Abstract
We estimate the potential ultimate cost of fossil-fuel carbon to a long-lived human population over a one million–year time scale. We assume that this hypothetical population is technologically stationary and agriculturally based, and estimate climate impacts as fractional decreases in economic activity, potentially amplified by a human population response to a diminished human carrying capacity. Monetary costs are converted to units of present-day dollars by multiplying the future damage fractions by the present-day global world production, and integrated through time with no loss due from timepreference discounting. Ultimate costs of C range from $10k to $750k per ton for various assumptions about the magnitude and longevity of economic impacts, with a bestestimate value of about $100k per ton of C. Most of the uncertainty arises from the economic parameters of the model and, among the geophysical parameters, from the climate sensitivity. We argue that the ultimate cost of carbon is a first approximation of our potential culpability to future generations for our fossil energy use, expressed in units that are relevant to us. Keywords Climate impact . Carbon cycle . Deep future . Cost of carbon
1 Introduction The social cost of carbon (SCC) is a concept that was formulated to account for climate change in cost-benefit analysis (Nordhaus 1982, Pearce 2003, Stern 2006, Greenstone et al. 2013, National Academies of Sciences 2017. Costs from climate change are imposed on models of
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10584-02002785-4) contains supplementary material, which is available to authorized users.
* David Archer d–[email protected]
1
Department of the Geophysical Sciences, University of Chicago, Chicago, IL, USA
2
Department of Philosophy, University of Chicago, Chicago, IL, USA
3
Lyman Briggs College, Michigan State University, East Lansing, MI, USA
Climatic Change
the human economy, assessed relative to a control case without climate change. The presentday value of future costs is obtained by discounting (Ramsey 1928). For emissions in 2010 and discount rates of 2–5%, the SCC is estimated to be about $20–50 per ton of CO2 ($70–180 per ton of C) although higher values have been proposed (Ackerman and Stanton 2012, Kopp and Mignone 2012, Greenstone et al. 2013, Moyer et al. 2014, Moore and Diaz 2015, Nordhaus 2017). Because future damages are discounted to calculate their present-day values, costs that accrue more than a few centuries into the future become negligible to the present. However, the time scales of the carbon cycle, sea level change, and soil responses to present emissions are much longer than this and are mostly missed by the SCC (National Academies of Sciences 2017). This paper formulates and estimates an ultimate cost of carbon (UCC), integrated over the entire geophy
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